WASHINGTON – The State Department’s announcement that it is postponing a decision on the fate of the Keystone XL pipeline has drawn condemnation from both sides of the political aisle, with criticism of the delay ranging from “shameful” to “a stunning act of political cowardice.”
The pronouncement, issued late on the Friday before Easter when the public’s attention was elsewhere – something of a tradition in Washington when the news could be considered controversial – cited the need to wait on a Nebraska state court decision regarding the ultimate pipeline route and obtain additional comments from governmental agencies.
A State Department official, who provided background to reporters in a Friday conference call, stressed that the proposed route may change as a result of the Nebraska district court decision, a move that would require additional environmental study.
“The prudent decision was to allow additional time,” the official said.
Recommendations on how or when to proceed with the pipeline are in the hands of the State Department since it is a multinational project that also involves Canada.
At issue is a complaint filed by three landowners who reside along the proposed pipeline route who are challenging a state law that provided Gov. Dave Heineman the authority to approve the project. The District Court sided with the landowners, maintaining that the decision actually rests with the Nebraska Public Service Commission, created in 1885 to remove politics from railroad condemnation decisions.
The case is headed for the Nebraska Supreme Court. In the meantime, the Obama administration intends to play the waiting game, an unpopular decision in some quarters.
“It is crystal clear that the Obama administration is simply not serious about American energy and American jobs,” said Senate Republican Leader Mitch McConnell, of Kentucky.
“At a time of high unemployment in the Obama economy, it’s a shame that the administration has delayed the construction of the Keystone XL pipeline for years,” McConnell said. “Here’s the single greatest shovel-ready project in America — one that could create thousands of jobs right away — but the president simply isn’t interested.”
House Speaker John Boehner (R-Ohio) called the move “shameful” and accused President Obama of caving in to environmental interests who oppose pipeline construction.
“With tens of thousands of American jobs on the line and our allies in Eastern Europe looking for energy leadership from America, it’s clear there is little this administration isn’t willing to sacrifice for politics,” Boehner said. “For no reason other than the president’s refusal to stand up to the extreme left, good-paying jobs and North American energy remain out of reach. This job-creating project has cleared every environmental hurdle and overwhelmingly passed the test of public opinion, yet it’s been blocked for more than 2,000 days.”
This time Republicans weren’t alone in chiding the president. Three Democratic senators facing tough re-election campaigns – Sen. Mary Landrieu, of Louisiana, Sen. Mark Pryor, of Arkansas, and Sen. Mark Begich, of Alaska – questioned the administration’s decision.
Landrieu, chairwoman of the Senate Energy and Natural Resources Committee, was particularly critical, asserting the “indefinite delay” was “irresponsible, unnecessary and unacceptable.”
“By making it clear that they will not move the process forward until there is a resolution in a lawsuit in Nebraska, the administration is sending a signal that the small minority who oppose the pipeline can tie up the process in court forever,” Landrieu said. “There are 42,000 jobs, $20 billion in economic activity and North America’s energy security at stake.”
Pryor maintained “there’s no excuse for another delay.”
“The President needs to approve this project now to ensure our future energy security and create jobs here at home,” he said.
And Begich added that he is “frankly appalled at the continued foot-dragging by this administration on the Keystone project.”
The Keystone pipeline is a project of TransCanada Corp., an energy company based in Calgary, Alberta, with a projected cost of $5.4 billion. It primarily is intended to transport oil sands bitumen – sands saturated with a viscous form of petroleum — from Canada to Gulf Coast refineries.
Two phases covering 2,151 miles already are operating, one from Hardisty, Alberta, to Patoka, Ill., and a second from Steele City, Neb., to Cushing, Okla. A third phase under construction will run from Cushing to the Texas Gulf Coast.
The pipeline system currently in operation can move up to 590,000 barrels of the crude Canadian oil to refineries in the American Midwest per day.
It is a proposed fourth phase that is drawing controversy. TransCanada wants to run a 1,661-mile pipeline from Hardisty crossing over the border into Morgan, Mont., to move 830,000 barrels of crude oil per day. If approved, it will terminate in Steele City, where the oil will enter the other pipelines.
Environmentalists strongly oppose the fourth phase, expressing concern over oil spills and the potential for damage to the Ogallala aquifer, one of the world’s largest underground water tables, which spans eight states, provides drinking water to two million people and supports $20 billion in agriculture.
An environmental impact statement determined that extraction and transportation of the oil sands would carry little impact and likely will not contribute significantly to global climate change. While extracting and burning tar sands produces greenhouse gas at a rate that is 17 percent greater than the burning of traditional oil, the report held that tar sands oil will wind up on the market regardless of whether the pipeline is built or not.
As far as the potential for large, devastating oil spills, the report said, “The proposed Project would include processes, procedures, and systems to prevent, detect, and mitigate potential oil spills.”
TransCanada, the report said, has agreed to “incorporate additional mitigation measures in the design, construction, and operation of the proposed Keystone XL Project, in some instances above what is normally required” in order to reduce the risk of spills.”
On the economic front, the environmental impact statement found that the pipeline would contribute about $3.4 billion to the U.S. gross domestic product.
“The figure includes not only earnings by workers, but all other income earned by businesses and individuals engaged in the production of goods and services demanded by the proposed Project, such as profits, rent, interest and dividends,” the report said. “When compared with the GDP in 2012, the proposed Project’s contribution represents approximately 0.02 percent of annual economic activity across the nation.”
In addition, construction spending would support a combined total of approximately 42,100 jobs throughout the United States for the up to two-year construction period.
“Of these jobs, approximately 16,100 would be direct jobs at firms that are awarded contracts for goods and services, including construction, by Keystone,” the report found. “The other approximately 26,000 jobs would result from indirect and induced spending; this would consist of goods and services purchased by the construction contractors and spending by employees working for either the construction contractor or for any supplier of goods and services required in the construction process.”
The reaction wasn’t completely critical. Sen. Barbara Boxer (D-Calif.), chairwoman of the Senate Environment and Public Works Committee, said the decision was “entirely correct,” given the “unprecedented number of comments from the public on the Keystone XL pipeline proposal, and the legal uncertainties due to lawsuits in Nebraska.”
And it carried the support of environmental groups. Susan Casey-Lefkowitz, director of the international program at the Natural Resources Defense Council, called the move “prudent.”
“Getting this decision right includes being able to evaluate the yet-to-be determined route through Nebraska and continuing to listen to the many voices that have raised concerns about Keystone XL,” Casey-Lefkowitz said. “The newly extended comment period will show what we already know — the more Americans learn about this project, the more they see that the Keystone XL tar sands pipeline is not in the national interest.”
White House press secretary Jay Carney told reporters at Monday’s briefing that the process was being handled by the State Department, “in keeping with past practice by administrations of both parties going back many decades.”
“The president wants the process to be conducted in a way that’s consistent with past practice and consistent with the interests that have to be examined when you’re talking about an international border being crossed by a pipeline. There have been a series of moments along the path here where politics has played a role in delaying the process, as you know — actions that Congress took, for example. And then there have been other instances where either local or state concerns slow down the process, or, in this case, action by a state court had an impact on the process itself,” Carney said.
“What the president has insisted on all along is that this process be run out of the State Department in accordance with established tradition for matters like these, and that’s been the case here.”
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